tv Book Discussion on The Human Cost of Welfare CSPAN May 5, 2016 1:57am-3:09am EDT
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the people of poverty to tell their stories. they will tell us about this, we will have conversation and then get you folks involved as well. phil harvey is the chief sponsor of the dkt liberty prooject which is a group that raises awareness about liberty and freedom in the united states. he is the author of a number of other books including what every child we wanted, how social marketing is revolutionizing contraception use around the world and government creep, what the government is doing that you don't know about. he writes for the huffington post and many other journals. he is chairman on the board of dkk international. and lisa conyers is the director of policy studies and works on topics like inequality and civil liberties.
she has a bachelor from the university of george washington and masters from the university of maryland. this is a terrific book that we will be assigning later on. if you haven't brought bottom of the one already i urge you to do it. let's hear from the authors of it in the mean time. we will start with phil harvey. [applause] >> thank you for coming out and thank you for being here on what started to be a rainy day. thanks to the cato institute for arranging this and making it possible. and special thanks to michael tanner. michael has written, studies, lectured widely on subjects relating to welfare and poverty in the united states and his
work has greatly informed our book and we are especially grateful for him on that. we will talk a little bit about the basic issues of outlined in the book. issues related to welfare and its problems. we will talk quickly about the welfare state and the extent to which the united states is becoming one, the correlation between between the rise in welfare and the drop in workforce participation in the united states, the extent to which people on welfare feel trapped and in many cases are trapped in a cycle of welfare and poverty and dependence. and we will discuss the benefits, which is one of the
principle reasons for that feeling, that senation -- sensation of entrapment that so many who lisa interviewed expressed. first, let's take a quick look at the relationship between welfare spending and defense spending in the united states. it it seems to me that given the fact that america spends almost as much as the rest of the world put together on defense that the fact that welfare expenditures are overtaki overtaking already and are destined to overtake defense spending in the years that will go by means we have come a long
way indeed to becoming a welfare state because it is now a larger budget than defense. the next slide sews the inverse correlation between increases in welfare expenditures. this is a particular steep increase. the blue line is food stamps, the food stamps program, which s skyrocketed more than the others. the red line is workforce participation. this doesn't prove causation but we think that the correlation between these two items is not
entirely coincidental. welfare spending at the federal level is nearly 700 billion a year and our feeling, after doing the research, and lisa doing over a hundred interviews with welfare beneficiaries is that the cost to us as taxpayers is high but not as bad as the cost being paid by the beneficiaries of this program and i will explain why we will that way. two principle reasons for the sense of being trapped in poverty which people hate, of being dependent on the government which people hate.
two reasons are the benefits and the culture itself. the benefit clip is the people receiving the benefits as the point when they earn too much money they will lose their benefits, perhaps unpredictably and suddenly. the rules are there but very complicated and very hard to figure out. one woman, at least that i interviewed, quoting her case worker, said you are learning a little money now and we will have to cut your benefits. that woman is afraid to earn any money now. exactly the opposite of what i think people in poverty want to do and exactly the opposite of
what we would like for them to be able to do. the safety net for some people works the way it is supposed to. you lose a job, go on food stamps for three or four or five months, get another job and you go off. for those people, the safety network works the way it is supposed to. i don't think we want to imply that welfare is a trap for everyone. for a significant number it is not. but we now see more and more people on for three, four, five, six years. and that is the population we are particularly concerned about and the population that is
trapped and miserable. we have been warned of the dangers involved and we are seeing some of the dangers today. roosevelt referred to release as it waw called then as a subtle narcotic. i think an insightful description. a destroyer of the human spirit underlining dignity and self respect. we must preserve self-reliance. he understood the dangers. why does financial dependence on the government have these
innervating and deeply negative effects? it is because all of us want to accomplish things in life, all of us want to be able to say i did that. i raiseded a family and supported by family and got my kids into college and learned to play the saxophone. it is expressed in different ways but we all need earned accomplishments to make our lives worthwile -- worthwhile and that is the element missing in people that rely heavily on welfare. one of the women lisa interviewed expressed this well and i want to read the quote. i quote here, this is a woman in
decatur, illinois. i remember that first paycheck when i went back to work like it was yesterday. $177. not much, right? but it was mine. and i took it home and showed it to the kids and it made me feel good inside. my kids need so many things; diapers, shoes, clothes and need me to provide for them and it gives me pride to do that instead of them seeing mama cashing welfare checks. i think that encapsulates the human part of this delima. most of the time, the answer for the need and earned accomplishment is the job. not for everybody, but for most people it is paid work.
we encountered a man named angel who had been on welfare for many years and was angry about the fact. he said you go to there welfare office and they should have jobs on the bulletin board and there should be jobs available in the community. but they don't. you go in on the bulletin board and it says need help with food stamps? need medicaid assistance? nothing about jobs. and that is the other aspect of this form of entrapment. the whole system, including recruiting, government workers sponsoring bingo night for seniors to get them to come in
and sign up for food stamps. there has been some pushback on that recently and i am glad to see that recruiting is taking the business too far. but the psychology of the system is more welfare, more different welfare programs and nothing about jobs and work. tanf is a program that replaced aid to families with depend children back in 1996 and that program is very small, only 2-3 percent of the total welfare package. so the other programs have overtaken it and don't have work components. there is one program in the system, the earned income tax credit, which does require work and earning in order to enjoy that benefit.
and we think that shows the way to greatly improve the system and come up with ways of making the situation a lot better. thanks. >> i just have one simple slide. this is a monday and great way to start the week so thanks for coming out. i think to thank michael tanner for having us and cato institute. i love they put on these events and get us together to talk about these things. i am delighted to be here.
i will talk about the philosophical underpinning behind the book because it is based on a philosophical idea and then i will talk about how we did the book, how i did my travels, and open it to questions from michael and you guys. the reason i picked this slide is because that is basically the philosophy behind the book is that we have the right to life, liberty and the pursuit of happiness but we are most interested in the pursuit of happiness. and the idea is that what we want to look at is if we have the right to pursue happiness, what is that mean, what does it mean to be happy, what does it take for all of us to be happy and then once we decide on that, what does the welfare system have to do with that? will it help us be happier or not be happier? is it helping the people on it live satisfied lives? that is the question we wanted
to answer with the book. as far as happiness goes, we are not the first to come up with what we do for a living is essential to human's happiness. what we do to get that earned success. and scholars from sock and on have talked about happiness. probably the first question i would ask you is what do you do? are you an artist? teacher? writer? policy analyst? that is how we identify who we have and what we have doing with our lives. if we agree we have the right to pursue happiness and we agree happiness is tied up with what we do for a living and how we earn our way what does the welfare system look like under those parameters? does it help people be happy or does it not? that was the underlying
philosophy behind the book. there is a lot of policy analysis and plenty of charts in there but it is a deeply philosophical thought and idea we wanted to address. what we found out when we started looking at welfare programs is they put people in a position where work is a threat tlarnth reward. it is risky to go to work. you will lose there benefits if you go to work. the rules are strict and very hard to deal with. when you hear about, for example, you know, a lot of people on welfare are working. what about the working poor? they are working; right? but the problem is they are being told they can work a few hours a week or a month so they can earn so much but if they go over that you are off the rolls. i met a lot of people who tripped up over the rules with a gift from an aunt or somebody dying in the family and leaving them money and suddenly they were thrown out of the programs and left in a position where
they had to get back on and it took several months. the whole psychology about work changes when you are on these programs. the value of the programs becomes greater than a job you could get. so, for example, phil talked about the welfare cliff and the director of health and human services in the state of pennsylvania looked at this and did an example of a woman in this position and what it looks like. he took a single mom with two kids, in the suburbs getting cash assistance, food stamps and wic which is additional food for her and her infant, she would get housing and be on medicaid. he found adding up the benefits you would have to earn close to 59,000 a year to replace those benefits. if somebody wants to go to work and they are offered a job and
it will not cover the value of those benefits they make a rational decision based on the incentive to not work and that is scary because maybe in the short term we think that is okay, we are helping them out and they are getting support so that is good; right? we don't want the poor to not get support. but we are actually telling them not to go to work. we do this in the disability system. anyone familiar with anyone on disability, you know you are told not to go to work if you get on disability because you have a good chance of loosing your benefits so we take people that are disabled that would like to work and make work into a risk. so that is basically the underlying philosophy behind this book that we believe we do all have the right to pursue happiness and happiness requires work and success and welfare systems get in the way of that. if you get that in a nutshell you get the premise of the book. as far as my role in the book, phil and i did a lot of policy
analysis together, but we wanted to do a book that is different than most work coming from d.c. which is heavy on policy analysis but missing what it is like and how the policies play out in real life so i traveled all over the country, the northeast, southwest, you know, the pacific northwest, california, hawaii, all over the place. and i went into soup kitchens and homeless shelters and tent cities and bus stops and wherever i could find people that would be willing to talk to me and asked if they would be willing to talk to somebody writing about welfare and what their life is about. surprisingly people were happy to show me the math, what they were living on and how many dollars they got. and we took that and added it to the policy analysis. it goes on with stories from the
road after that. we think that is a unique contribution to the whole field of policy. research and we were delighted to do it. i will open questions from michael now. i think i did what i am supposed to do. all right. [applause] >> one of the really fascinating things about the book is you did talk to participants and -- [inaudible conversation]
>> starting again, you gave voice to people in the system which is unusual. i am curious in terms of this, what you learned about why people are poor. essenti essentially if you look at the debate, people say it is based on racism and sexism and things beyond individual's control and there is another side saying it is bad behavior on the part of the poor. they have done bad things and made mistakes and made bad decisions and that is why they are poor. you interacted with the poor. what did you see in those regards? >> i think people are poor because they don't have any
money. but i think, you know, it is a very complicated subject. it is everything from bad decision making, certainly i saw people who had made bad decisions and ended up in a position where nobody would hire them or they had, you know, addiction issues where they could not hold a job. there are all kinds of reasons why people are poor. i don't think there is any one. i think the fact i did my travels during the recession made it interesting because i was seeing people who had just -- i mean there was a lot of job loss during that time and i was traveling around and people were saying it is easy to talk about this but there are no jobs available and what am i supposed to do? that made it more complicated. the answer is for many reasons. but the vast majority of the people i interviewed would much rather be working.
i heard over and over again i would rather be doing work, doesn't matter what kind of work, than having to be on these programs. some people say people out there don't want to work. maybe i expected to see a little bit of that and i am sure it is out there but i didn't meet people like that. i met people who were trying hard and their preference would have been to be working. >> the war on drugs has certainly contributed. the fact that so many young men, particularly young black men, are spending time in jail, clearly find it harder to get legalal work -- legal work as a result of that and that is another cycle of poverty and incarceration but it has certainly added to the poverty
cycle in the united states. >> i think that is pretty undeniable. i think the other thing you make such a strong case in the book for is talking about the marginal tax rate or the fact when people earn money they lose their benefits, are taxed on that income quickly, and the fact that discourages work i think pretty clear. we made that case and many people had a study called the work versus welfare trade off that is criticized and i think in the pennsylvania study and there is an ohio study that confirmed where we were coming down on that. and i think your book really builds on that work. what would you recommend as an alternative to that? i know when we brought up that stu
study some people talked about the earned income credit. what do you recommend as an answer? >> certainly making welfare point toward work is an important part of that. the present system is anti-work. it is almost a war on work. and that is insane. we ought to be helping people get out of the system at the very least. i did mention the effect is popping up wages. that is very good. it requires filing an income tax return, it was basically
designed originally to refund low income people any federal income tax that had been wi withheld from their wages but tops the amounts considerable more than has been held. it makes work pay. it has contributed substantially to getting people out of welfare and into work and to take a job that may pay $7-$8 but when you get the eitc benefit it is the same, again with the cumbersome process, as earning $12-$13 per hour and that is the right way to go about it. i agree about the plethora of benefits, housing, food, etc, is very patronizing and to the extent we can give people money
and let them make their own decisions about their own lives and set their own priorities. >> we have seen some states like kansas and missouri coming down with drug testing of recipients and the prohibition of buying sea food with food stamps and limiting people on tanf $25 limit on the atm per day. do you this as being counterproductive to the way people have to live? >> it is dumb. >> there you go. well, and, yeah, i guess i would agree with phil.
people are -- just because -- they can make good decisions and will make good decisions and don't need a lot of patronizing to do that and it doesn't seem to work well in the places it tried. it gets passed and immediately rese recended. >> and you talk about the national income replacing the piles of programs we and one problem is trying to make the numbers work. we did a study and can't find a way to make the numbers work. is that something you are open to? >> yes. there are two kinds, and i think we need to distinguish the system which was called negative income tax that topped up people's wages turned out to be a work killer for the very
simple reason that if you were making $9,000 and the established level was $12,000 the government gives you $3,000 and under those circumstances you have no incentive to make that $3,000 yourself because you will end up with the same amount of money anyway. the purest plan is the book in his hands and that is to give every adult american $10,000 a year and nothing else. this is affordable if you don't give it to the truly wealthy. i think that distinction does have to be made. if you are giving ten thousands a year to millionaires and everybody in between it does cost too much.
i agree michael has written a good deal about this on experiments of giving people money and letting them make their own decisions murray sets up interesting hypotheticals saying $10,000 a year and if three or four want to get together and rent a shack on the beach and spend the rest of your life surfing you can do that. there are no incentives to work or disincentives to work. no incentive to have children or disincentives. it is neutral in that respect. my reservation about that, having found the power of the relationship between work and
happiness in doing this book, is that too many people wouldn't work and even though that would be their own choice, there is no guiding hand telling them not to work but people who are not working generally are not as happy as people who are. i have that concern. but i do think we should test it. >> yeah, the thing the study done in the 1970s showed the negative income tax did have a discouraging affect on work because of the marginal tax problem. murray suggested $25,000 tax free and tax above that. making the numbers work seems to overcome the theory on that. what about the other approaches being talked about out there? one of the big things on the republican side is consolidate
the programs under the state? paul ryan wants to do with it a small number of programs and marco rubio didn't spell out details but it is almost everything giving to the states in terms of a block grant and having standards the state has to meet to continue to qualify. would that be an approach you think you would be in favor of? >> what did you hear at that meeting in south carolina? >> i was on the advisory council for paul ryan's poverty summit in south carolina in january where six of the republican presidential candidates came and talked about poverty for half a day which is really cool. i mean paul ryan really had some energy in the room but unfortunately the six candidates who came are no longer on the rise and the democrats were invited but chose not to attend.
>> mitch was there. he is not out. >> there is one left standing. -- kasich. in terms of the blocks grants, the 1996 welfare reforms were supposed to have a work component, you were supposed to be given encouragement and ways to get a job and the idea was ending welfare and getting everybody into work. a lot of those programs were sort of turned over to the state for enforcement. what happens on the state level is all of a sudden you are dealing with real people and low and behold waivers started happening. if you look at federal welfare programs as they play out in the states today you find that even though something comes in with rules in washington when it gets out to iowa or washington state or wherever the state is dealing with the population of people on welfare and adjust accordingly. i have concerned about that but
i do like the idea of giving states more control on the flip side i am schizophrenic about it because i think the states deal with their population. when you hear about bush's programs they adjust the programs to meet the demands of the people. unfortunately, i have seen they loosen the requirements rather than tighten them for the most part. >> i think one of the things we will find here is interesting questions from the audience so i want to turn it over it them but before i do let me give you a chance to defend yourself against what i think will be one of the criticisms from the book and that is there is a certain mount of victim blaming going on. essentially you take a poor person living in the inner city, they have had terrible schooling because the inner city schools
are by and large lousy, they are dealing with the criminal justice system and the war on drugs that you said, there is no jobs certainly in their neighborhood. you go to the area where freddie gray was killed in baltimore there is not even a fast food store in that entire neighborhood. so super market. no employment opportunities. these are not people living in the suburbs. and then you have saying get a job. pull yourself up by your boot straps. is that a fair charge to put on that poor person to do that and aren't you in essence somehow saying they are behaving badly by not doing that? >> phil and i did a book event in baltimore a couple weeks ago and we had a bunch of people in
the audience and they were talking about how there were more jobs for people to have but they agreed they would rather be working. those folks would rather be working is our point. it is not they are living there because they chose to live in an inner city neighborhood where they don't have jobs available. still the idea they do want to work is still there. number two, when i travel around the country, i met people that i would ask why they would not move for work because you know at that time north dakota had 0% unemployment or something ridiculous. i would meet people in alabama saying what about moving for work which is something we used to do a lot. i did it growing up. and benefits hold you back from that because it is hard to get off the benefits and go move to another state and you have to reapply. so it is very complicated. as far as blaming the victim, i think that is exactly what we have not doing. we have saying we care deeply about these people and they have
just as much right to happiness as we do. why do they have more or less right to the same things we have. i have the right to happiness and they do, too. so to ignore them and say you live in a poor neighborhood too bad for you. phil and i are arguing we care about them and want them to be happy and believe their happiness comes from them working. >> the worst thing, it seems to me, that you can do to somebody is to put them in a situation cycle of dependency and poverty. that is cruel and we should not do it. the best thing you can do in this context, is make work more attractive.
doing more to create dependency that doesn't lead to satisfying lives but leads exactly the other way. i don't see any blaming the victim there. it seems the idea of providing more benefits is going to be good for them and we found it is not. >> that is a really important point. let's go to the audience. if you can wait we have a microphone coming around. identify yourself as they approach you with the microphone and then please keep it to a question and not a speech.
right here in the second row, right in the middle. right there. one of you. >> john holiday, i am an economist. a hypothetical question is all i will get out of this: what happens if you cut all of that, i am thinking in terms of this being a civil society and there is a family and other safety nets that are not uncle sam. what would it look like if you got rid of everything? i am not running for office... >> phil has a good answer to that. >> i think it is a fair question frankly. and in many respects there would be pluses. but let us say, right off, there would be decemberitutistitutiod.
americans giving away $350 billion a year to private charities and a great deal more, if we had no welfare, would go to poverty and less probably to the symphony and museums and universities so that i think society would adjust but there would be a period there that would be rough for some people. i do think that private fill
anthropy could be taking up more of the welfare issue and one of the recommendations we discuss in the book is giving people a tax credit for donating to a list of several thousand charities. there is always the problem of picking those charities but instead of giving money to the government for food stamps you could give it to the charity of your choice for assisting the poor and they would have to use it for something related to that purpose. i think that would be a good move. >> there is a couple more things i would add to that. there is a very robust underground economy. so, you know, there are people are not necessarily living on food stamps. they are living on food stamps and trading and bartering and doing all kinds of things. you have to keep that in mind. number two, part of your savings
could be a vast array of government employees that administer all of these programs and they would lose their jobs meaning more unemployment but we would free up money that wasn't directly going toward the poor anyway. >> the consumption data, if you look at what the poor spend as opposed to their income, it is some cases seven times higher in terms of consumption so it is significant. the other interesting thing in regards to what phil said is if you look at poverty rates prior to 1965 they were coming down steadily and they continued to come down through the early 1970s and then levelled off since then and you can arkue '65 to hid-70s whether it is due the welfare spending or the civil right act that brought african-americans into the labor force or the woman's movement. there is not a lot of evidence
to suggest traditional programs are lowering poverty. we no longer have the issue of a third of american poor not having running water in their homes but it is questionable if we are lifting people out of poverty with the programs we have. that gentlemen in the blue right behind the previous speaker. >> thank you. >> can you identify yourself? >> jim lanford, friends of the author or one of the authors. what consideration did you give, or might you give, to things that would stimulate job creation both by the private sector, and you know, the old new dealer type of public works projects and that kind of thing?
to me, from what i am familiar with, it is really difficult to find employment under the circumstances of the very low-income black areas with people loosing their jobs because of the outflow of jobs to other countries. so did you give consideration to that instead of trying to give people an incentive to find jobs give incentives or put some kind of pressure on the private sector to create plenty of jobs for the people we have and the federal government in a time of very low interest rates? ...
and taking care of forces teeth that require that you go to some college and a training course that cost $1,000 that stops people from getting new businesses started. it is one of the life bloods of our economy with a number of recommendations as to the availability of work one of the positive things is people are finding work and not telling anybody about it. half of the people that we talk to and reading it is indicative of the total population are working off the books. there is a big underground economy because it means they are finding ways of working and exchanging but i
having to how we got to hear from the political process and the concept that is embodied in the law that promised to this place so we will better understand with the different type of senate and house arrangements but yet this has happened republicans and democrats so if you can understand how we got to hear, those people can be rallied around the idea it doesn't work out the
way they wanted to be part of the constituency. we're not just a great deal about it. >> the way that we got here is fairly straightforward. as society becomes wealthier people are more and more embarrassed than we can afford those programs if people need medical care and we have medicaid. there is nothing mysterious with all the prosperous western democracies if they
become wealthier instead of thinking though whole society is wealthier so fewer people will be welfare and then we will use more of the people to help the port even though they needed less than they did before. it will happen with all western democracies i don't think it is terribly mysterious so the differences are right and left between conservative and liberal views benefit that is your asking.
>> even with republicans. >> we have time for to three more questions. thank you. would you agree that using the word poverty is that the government assistance level is misleading and we have used the word destitution but what we do is keep raising the level that government assistance is allowed. >>. >> it is a fair point a
number of scholars have hypothetically ast will we continue providing welfare when they can the froward second homes and sailboats. [laughter] is an interesting question. exceeding the standards of six years 70 years ago to have hot and cold running water with indoor plumbing a television microphone -- microwave and a telephone in the computer would have looked very good to my parents when they were beyond -- young long time ago. but a relative poverty and
to is a very deeply ingrained believe in american society. and as long as there are people that are conspicuously more power than most i think the concern will continue to exist. >> with basic in connection i was pleased to hear you mention of the main and experiment to see if you are following the discourse of european and canada of the
guaranteed floor to have the enormous support a referendum in switzerland in couple of weeks and pilot programs are launched in england and canada is needed in namibia. so can you comment o the rest of the world to provide insight into what they're doing? >> is the sign of the wealth in the world to read even considering and that is wonderful news but our concern is basically it is at war with the idea that people need to be working to be happy so if you just give them money then if you get a beach house there is nothing wrong with that but to have that philosophical question
what does that mean? and we're back to what we're doing right now some of his very interesting and we would agree to say the real excited about the studies coming down with more research as these places are reaching the point at the same time. having grown up in the developing world and we made a lot of progress all over the overall but the fact that they are looking at it is awesome. >> so to look at those results finland is another place switzerland will lose that referendum the first and it is proposed they will always lose. baby the netherlands we will have data in a couple of years and canada is still
trying to figure out how to figure out their experiment. they don't have data yet the we're still talking about it but will provide interesting data also if we're just putting more benefits in the pile but replacing the existing welfare system and the swiss we have no idea they love to the to the federalist to develop a that is why it will probably lose. so let's finish up with the last question of the afternoon. >> i have two questions. [laughter] i was monitoring twitter and
supposed a question asking was there any sibling to the interviews that you did and are you presenting them as representatives? my own question would be if labor person who knows a fair amount about welfare and has read a book or two or a study or to what is the most original thing and would get out of this book? it may be related. >> this was rand and there was no sampling. that would be my answer with that. i interviewed whoever would talk to me from indian reservations to the tent cities in seattle.
it was representative of the country which was important to me and i argued pretty hard all over the different regions. but i did not take five men or five women from each state or ages or do anything like that. and what was the question? >> why is this book different? >> the most surprising coming to meet that comes through pretty strongly is the central importance of work to a decent life. die as a libertarian up for
patronizing other people of not for the fact it is incredibly patronizing right now i would not be suggesting things that also seemed patronizing but it does seem to be in this emerges in the book is very controversial that the libyans are happier when they work and when they are forced to work even if they don't feel like working. there are those of us but a lot of the time what they react to and deal with successfully our challenges put in front of them. it is an eye opener for me
that is satisfying life requires even if unpleasant and it still seems to be fundamental from a decent and happy life. >> as a reader of the book one thing is a big take away that you read a lot of the books of laughed -- on the left talks about the fibers but i do find this is a unique voice in this debate. it is called the cuban cost of welfare.